28 Sep Fighting pandemics through medication, diagnostics and monitoring
Thierry Mauvernay, President, Debiopharm, illustrates how the world became his firm’s laboratory and why we all need to be ready for the next crisis, which could involve bacteria
Debiopharm is one of Switzerland’s success stories in the biopharmaceutical industry. The company’s core activities are around drug development and manufacturing, mostly connected to oncology and bacterial infections. To start this interview, can you give us an overview of Debiopharm? How does the company stand out in the Swiss and global life science industry?
My father created the company 41 years ago, starting in a garage with only two people. Very quickly he worked on peptide molecules, which were then developed into drugs, used specifically in prostate cancer. With about an 8-10 percent sales increase every year and around 25 percent of the worldwide market share, Triptorelin, our first product, is still a bestseller for Debiopharm, which is focused on two main therapeutic areas: oncology and infectious diseases. Today, our products treat more than 1 million patients each year, which makes us really proud.
You mentioned some of your key products, but what are today some of your biggest market successes that you are most proud of or that stand out?
One of our biggest market successes is Oxaliplatin, a standard of care platinum-based chemotherapy for colorectal cancer that is sold in more than 120 or 130 countries. It’s a significant blockbuster and a standard chemotherapy product.
I believe one of your molecules, Debio 1143, just recently made a lot of progress with the U.S. Food and Drug Administration (FDA). Can you tell us a little bit about Debio 1143?
Early this year we received the breakthrough therapy designation for Debio 1143. This recognition from the FDA, which is the most important regulatory authority in the U.S., is very significant for us. We expect to start Phase 3 trials this fall in about 41 different countries and at 200 different sites—a big mission. I believe this product could be a jewel for patients. It received a breakthrough designation because it shows a real difference between outcomes for patients that use our product and patients who don’t. This medicine works in synergy with radiotherapy, in fact it increases the radiotherapy effect to kill cancer cells and the cellular immune response. Radiotherapy is used in 50-60 percent of cancer cases, so that means this medication can work in a lot of different cancer types and can be a key tool in the fight against cancer.
Another area where Debiopharm has been focusing is digital health and you have been investing a lot in companies specialized in artificial intelligence (AI) and big data. To what extend do you think this is the future of healthcare and how is Debiopharm working to pioneer new medical and technological fields?
I don’t know if we are pioneers but 13 years ago we started to develop a strategic fund called Debiopharm Innovation Fund, with the vision that we have to go beyond medication, and we need to also cover diagnostics, monitoring and support to cover the patient’s journey. We decided to invest in different startups and, specifically, for diagnostics and monitoring. In our view, it’s quite easy to find incremental innovation internally but for disruptive innovation you need generally to look outside of the organization. So we just invested in an Israeli company called Nucleai that is specialized in analyzing biomarkers using AI and that can help us to determine if certain cancer treatments are right for the patient. The AI uses the data to provide complex insights that are not possible in a traditional laboratory. We have also invested in digital health monitoring companies, for example, Carevive in the U.S. that helps patients to monitor their symptoms. In addition, we invested in diagnostics with Immunexpress. For us, it’s essential to have a full vision: focusing only on medication is outdated.
Generally speaking, what can you tell us about Debiopharm’s research and development (R&D) efforts and what is your approach to nurturing innovation in your company?
One of the main characteristics of Debiopharm is that we don’t do basic research, we develop molecules. We like to say that the world is our laboratory. There are about 600 new opportunities in our two therapeutic areas every year. We team up with academia, universities, startups and big pharma; we generally organize 10 to 12 due-diligence assessments and we sign one in-licensing deal each year. For a company like us, being open-minded is crucial. Innovation is everywhere and we need to review all of it. When we sign a deal, we develop the medicine through multiple phases of research while leveraging partnerships and when we think that we cannot add further value to the product, we out-license it to big pharma. Our main clients are Sanofi, Pfizer and we just signed with the Japanese company Takeda. This year, Debiopharm received the ASAP Excellence alliance award for our long-term partnership of 35 years with IPSEN, which has been extended for another 15 years.
Aside from its traditional activities, Debiopharm has also been playing a role in the coronavirus crisis lately, both directly and indirectly through its investments. The company is involved in the diagnosis segment especially. Can you explain a bit about the efforts and contribution of your firm with regards to the COVID-19 pandemic and the task force you have implemented?
Pharma can fight against pandemics in mainly four different ways: diagnostics, medication, monitoring and vaccination. Vaccines are not our core business but monitoring is through our portfolio investments. Through one of our investment portfolio companies, BC Platforms, we are trying to stratify patients with low and with high risk. This tool can be very useful for the health systems in case of a second wave—to know who needs to stay at home, as we won’t be able to lockdown everybody once again. With regard to treatments, we have one antiviral: Alisporivir. We worked hard to bring this product to a clinical stage and I think we will receive authorization for it soon, even though this is not an easy treatment. We created the COVID-19 Task Force in the middle of March, with the idea that we didn’t want to earn any money from our products that could treat COVID-19. In case our treatment is successful, then all the revenues will go to our foundation for funding research against infectious diseases.
The main cause of death for patients infected with the COVID-19 virus is septicemia. Two of our portfolio companies, Immunexpress and Biocartis, can provide the quickest diagnostic test for septicemia. Immunexpress just received a CE marking in May and is expecting to receive FDA approval soon. Monitoring is also essential to follow the patient. One of our former investment portfolio companies, Kaiku, has signed with a hospital in Geneva to help to monitor patients in hospital and at home. I think we have had quite good results and our team can be proud of what they are doing.
You’ve been quite vocal recently about the Swiss research and startup environment. So, what is your perception of Switzerland’s competitiveness with regard to R&D in the biotech industry and bio-life sciences?
Switzerland is a very open country and this is a big advantage. There are only a few countries like Switzerland that have about 25-30 percent of international specialists, who bring a lot of intelligence to the industry. Switzerland appears to me like a platform or a hub, where you can plug in a lot of different innovations and this creates big opportunities. We are probably not the best when it comes to digitalization but Switzerland can work with different people and federate all of them. It’s a big benefit to have.
How do you foresee the current epidemic changing the research landscape of Switzerland? Do you think it will boost global cooperation, for instance, or on the contrary, will it bring further segmentation to the industry?
I don’t necessarily wish for enhanced global cooperation, as I think it’s better to have 10 teams of 100 researchers, rather than one team of 1,000 researchers. For research you need small teams, you need agility and flexibility in order to make discoveries and produce various innovations. This is different for manufacturing where you need to have a large team but, concerning research, you need a lot of continued innovation. Big organizations are not necessarily the most efficient. So I hope we will continue doing research in this way in Switzerland.
One of the major changes that I foresee following this COVID-19 crisis is a new focus on healthcare independence. In Switzerland, we speak a lot about food independence but from now on, certainly, we will also care about healthcare independence. Before today, we thought a lot about the minimum reserves of oil that we have—probably now, we will speak more about masks and drugs that we need to keep on hand.
Yet my big wish is that we think and plan ahead for the next upcoming pandemic, which may very well concern bacteria. We need to start working on this now to try and find new classes of antibiotics. If we don’t do this, I think we will be all guilty. We know that a lot of bacteria are resistant to antibiotics, as we can see in India or Russia. Each year, 1.8 million people die from tuberculosis, with more than 200,000 or 250,000 dying because tuberculosis is resistant to all antibiotics. Nobody speaks about it, but we really need to do something. I hope that this crisis can help us to think about the next pandemic and, specifically, a possible bacteria pandemic. For this COVID-19 virus, we can expect to have a vaccine by the end of this year or beginning of next year. But for bacteria, we need to have new antibiotics—and we normally need 10 years to create new antibiotics. We can probably stretch this to five to six years, but this means that you will live for five to six years with this kind of problem. So, this is an immediate issue that requires our attention.
Debiopharm remains an exception in Switzerland as the company is still private. How is this specific model helping Debiopharm’s business and helping it maintain its competitiveness and agility?
This is something that we discussed a lot with my father: what we want in the future. We agreed together that we want to keep Debiopharm private, because it gives us a lot of autonomy, agility, and the opportunity to build our future independently and not be obliged to produce figures each quarter, for example. To stay private, however, forces us to diversify. We were already involved in a strong diversification of our assets 15-18 years ago and are now quite diversified. We take a lot of risks to develop drugs: if we don’t succeed—in our industry the norm is more failure than success—we can always work on another project, because we are sufficiently diversified. We don’t necessarily want to expand in the future, even though we probably will because we have a very large portfolio with 13 different components, but what we really want is to become smarter not bigger. I expect and hope that Debiopharm will become smarter than it already is.
You mentioned the partnerships that you have with Takeda, Sanofi and so on. How are you working to accelerate new partnerships with industry players?
What is critical now is to use the digital tools. Debiopharm, as well as the rest of the pharma industry, needs to be more efficient. Now, we have new digital tools and so the next step is to integrate all of these. As an example, we have invested in Novadiscovery, a French company that works on virtual arms in the clinical development.
You are very active in acquiring stakes in companies. How do you select companies to invest in?
We evaluate about 250 to 300 new opportunities each year, specifically in digital medicine nowadays, and gradually this has become easier as we started to see success with some companies. Our approach is not only to provide money but to bring our expertise and our experience—what we call “smart” money. Our deal flow is quite substantial and we receive more and more quality inflow. We just invested in Nucleai in Israel and completed an exit deal for the Finnish company Kaiku this year. Exiting our portfolio is never our decision, we commit to stay with the company over the long term, but very often it’s the startup founder’s decision. When they create a company, they have already planned their exit five years later, for instance. So of course, we stand by the founder and we follow the founder.
Switzerland is the world’s most innovative economy and has a substantial pharma industry. According to several indexes, it has the highest number of patents per capita in the world, is host to corporate giants such as Nestlé, Novartis and Roche, and is also home to what’s been called the “health valley.” How would you rate Switzerland’s innovativeness and responsiveness during the COVID-19 crisis?
Switzerland often ranks number one when it comes to innovation. That’s because it’s an open country and a platform for innovation. If you take Nestlé or Roche or Novartis, a lot of their innovation is not created in Switzerland, it is invented in the U.S., but its accounted for as innovation coming from Switzerland. So, Switzerland is really a platform and we need to keep it this way: we need to keep the country open so that it’s quite easy to welcome foreigners and let them integrate. Debiopharm is a very good example of the Swiss openness and integration model: in our building we have 41 different nationalities. If the country can stay like this, Switzerland will continue to have a very important role to play.
To conclude this interview, what would be your final takeaway message for our readers?
We need to be aware of a possible next bacterial pandemic. We have the capability to find new classes of antibiotics and we need to add a minimum of 10 new classes, according to the Infectious Diseases Society of America. That means we have to put about $20 billion on the table, which is not a lot if you compare it with what we have spent during this COVID-19 crisis. ¢20 billion over 10 years is $2 billion a year worldwide. If we don’t do this we risk having a problem with bacteria turning resistant to antibiotics. It will be much worse than the COVID-19 outbreak of this year. It’s not so difficult to solve this problem—we know which bacteria are resistant to antibiotics—so why don’t we do something? Debiopharm is trying to do it, but there is only so much that we can do on our own.
Today, antibiotics need a new economic model. The current system produces serious health and economic issues, such as overconsumption leading to resistance and difficulty funding research. Furthermore, the latest generation of antibiotics should be used only when really needed, so as not to not create new resistance, or only as a last resort when conventional treatments have failed. This is a shrinking market, with low prices and this economic paradox will not be resolved by an increase in prices. We have to change the market logic in which the profits come from the volume of products sold. This is why I think that, in the future, the pricing policy for antibiotics could reflect that of the insurance industry. For example, for a 100-bed hospital, you pay a fee each year for the right to use a targeted antibiotic. With 200 beds, the amount would be doubled, whether they are filled or not. This model is currently used, for example, by insurance companies and even in the defense industry. When nations buy weapons for the armed forces, they hope not to use them. Similarly, you buy a car provided with an airbag for safety reasons, but hoping not to have to use it. Paying for antibiotics by each single use is not suitable for the future of our industry and, therefore, this pricing structure must change to promote the development of new classes of antibiotics.